Rivian Delays Georgia Plant as CEO Says It Will Be Vital for Production, Exports

Electric vehicle maker Rivian’s reveal of a smaller, more affordable SUV should have been a day of celebration in Georgia.

The company has long said that a $5 billion plant east of Atlanta would make the R2, a five-seater starting at $45,000 that will help Rivian reach a broader segment of the car-buying public.

Instead, Rivian’s big day brought uncertainty over its Stanton Springs development in Social Circle, Ga., as it announced construction will be suspended at a time of rising costs and downward pressure on EV sales.

The R2 will initially be made at the company’s existing Normal, Ill., facility, a measure CEO R.J. Scaringe said would save $2.25 billion as it works to bring the R2 to market.

The news was a hit both with Wall Street and potential consumers: Rivian’s stock price soared 14 percent Thursday, and it notched 68,000 R2 reservations (consumers put down $100) in a single day Thursday. Still, it’ll be at least two years until those cars roll off the line, and while Rivian has some $9 billion in cash on hand, some analysts worry it will burn through that stockpile before generating significant revenue from the new model.

Rivian has until 2030 to meet its commitments in Georgia and retain the more than $1.5 billion package it received in property tax abatements, land acquisition and preparation, training facilities and other incentives.

If it does not maintain 80 percent of its commitment to $5 billion in capital investment and 7,500 jobs by the end of 2030, the company would be subject to clawbacks whereby the state recoups some of the funds put into the site. The provisions also require the company to maintain those commitments through 2049. From the agreement:

Rivian will be required to make a proportional, pro-rata repayment of the total JDA property, state property, and state land improvements, and estimated real and personal property tax savings. If Rivian is below 20 percent performance in any single year then an acceleration provision kicks in and Rivian must repay everything.

In an Atlanta Journal-Constitution op-ed Friday, Mr. Scaringe explained the rationale behind the delay and stressed that the company remained committed to the Georgia site, where grading work has been completed but not vertical construction has begun.

“We will care for the site in the run-up to construction with the goal of minimizing inconveniences this delay may cause. To be clear, we are absolutely dedicated to bringing our Georgia plant to life with good jobs, economic development, and a product to be proud of,” he wrote.

He also added that Georgia would be key to the eventual export of Rivian’s vehicles, including the surprise R3 hatchback introduced at Wednesday’s event.

“Georgia will be critical to taking R2 and R3 international, and it will be incredibly satisfying to see ‘assembled in Georgia’ on our future vehicles,” Mr. Scaringe wrote.

Rivian is reportedly up to date on its $1.5 million annual payment in lieu of taxes on the nearly 2,000-acre site, with $3 million paid in so far.

Highlights from the incentive package and the full document are below. While many incentives are statutory, such as job tax credits that all inbound investors can access, the below list constitutes money that the state or the joint development authority have laid out to prepare the site for Rivian or a potential future investor should the project not move ahead:

• $11.3 million. Regional Business Economic Assistance or REBA grants of for site development and a rail line,
• $141.8 million. REBA grant for land acquisition, wetlands mitigation and grading of 500 acres
• $51.5 million. Georgia DOT road infrastructure work for a new I-20 interchange, access road and other improvements
• $62.5 million. Dedicated Quick Start training facility built on site
• $26.9 million. Customized workforce training program.
• $24 million. 665 acres contributed by the joint development authority.

The Rivian site has been fraught from the beginning, with legal challenges from community groups raising concerns about environmental damage and community impacts. The Georgia Supreme Court last July paved the way for the incentives deal after a challenge.

Meanwhile, Georgia’s other electric-vehicle plant plowed ahead, with Hyundai Motor Group executives visiting the state in late February to say that its Meta Plant near Savannah would start production in the final quarter of 2024, earlier than expected.

Hyundai has hired 566 people on its nearly 3,000-acre site, the first fruits of a planned 12,000 jobs on a $12.6 billion investment around Georgia. Seventeen suppliers have already announced they will invest a cumulative $2.5 billion to support the plant, with many already under way. The plan is to make 300,000 Hyundai, Kia and Genesis EVs there per year. Learn more here